Canadian officials surprised investors by cutting, rather than
raising, expectations for the country's canola and wheat harvest, citing the
loss of crops to "excessive rains" in the main Prairies production area.
The wheat harvest in Canada - the world's third-ranked
exporter last season, and a leading producer in particular of spring wheat - will hit 27.70m tonnes this year, Statistics Canada said
following a survey of nearly 13,000 farms.
Although investors have factored in a large drop in
production from last year's record 37.53m-tonne crop, boosted by a bumper yield,
they had expected StatsCan at least to beat an estimate from Canada's farm
ministry, AAFC, of 27.74m tonnes.
Indeed, analysts had expected a figure of 28.5m tonnes.
For canola, StatsCan pegged production at 13.91m tonnes.
Investors had forecast an estimate of 14.5m tonnes, a drop
from the 17.96m tonnes recorded last year, but again above an AAFC forecast of
StatsCan crop data, change on AAFC estimates and (on market forecasts)
All-wheat: 27.705m tonnes, -35,000 tonnes, (-790,000 tonnes)
Canola: 13.908m tonnes, -540,000 tonnes, (-590,000 tonnes)
Corn: 11.431m tonnes, +130,000 tonnes, (-69,000 tonnes)
Barley: 7.163m tonnes, -177,000 tonnes, (-337,000 tonnes)
Soybeans: 5.901m tonnes, -199,000 tonnes, (-199,000 tonnes)
Oats: 2.639m tonnes, -401,000 tonnes, (-361,000 tonnes)
StatsCan officials said: "Canadian farmers expect production
to return to more normal levels in 2014 for wheat, canola and corn, following
record levels set in 2013."
However, besides a drop in yields, they also cautioned over
acreage losses too, saying that "farmers in the Prairies reported that excessive
rains in late June were likely to affect harvestable area".
For wheat, StatsCan estimated area, as measured by harvested
acres, falling 2.6m acres this year, compared with an estimate in June of a
2.0m-acre fall in sowings.
The main producing province of Saskatchewan, which has seen
heavy storms this month too, is expected to account for more than half the loss
in harvested area.
For canola, StatsCan, which in June estimated Canadian plantings
of the rapeseed variant rising by nearly 300,000 hectares this year, forecast a
decline in harvested area.
Again, Saskatchewan will see a particularly large decline in
harvested area, of 495,000 acres.
On the markets, the immediate reaction was to lift November canola futures fromCan$425.00 a tonne before the day to Can$427.00 a tonne, a gain of 0.7% on the day.
Spring wheat futures, traded in Minneapolis stood 0.4% higher at $6.12 1/2 a bushel, outperforming winter wheat futures, as traded in Chicago and Kansas City.